CBA blocks credit card purchases of Bitcoin, other digital currencies
- 14 February, 2018 16:29
Commonwealth Bank customers will no longer be allowed to use their credit cards to purchase Bitcoin and similar digital currencies.
The bank announced the new policy today.
“Due to the unregulated and highly volatile nature of virtual currencies, customers will no longer be able to use their CommBank credit cards to buy virtual currencies,” the bank said.
CBA customers will still be able to purchase and sell Bitcoin and its ilk through their transaction accounts and debit cards.
“We have made this decision because we believe virtual currencies do not meet minimum standard of regulation, reliability, and reputation when compared to currencies that we offer to our customers,” the bank said.
“Given the dynamic, volatile nature of virtual currency markets, this position is regularly reviewed.”
The move follows a turbulent period for Bitcoin. The digital currency dropped in value from around US$19,000 in late 2017 to close to $6000 earlier this month before beginning to climb again. Other cryptocurrencies saw significant swings during the same period.
CBA said that there have been some instances where customers are unable to buy or sell “virtual currencies” using their debit cards.
The bank said that there could be a number of reasons that a transaction may be blocked. The include a cryptocurrency exchange site being blocked by the bank because of fraudulent transactions, a payment method no longer being accepted by the exchange, or the exchange’s bank blocking the transaction.
The bank said that customers will still be able to receive payments from digital currency exchanges on their credit cards.
Although CBA has expressed concern about cryptocurrency fluctuations, it has conducted a number of experiments inspired by Bitcoin’s blockchain, which is the distributed ledger system underpinning the currency.
Exchange operator ASX in December confirmed that it would replace its CHESS system, which provides post-trade services, with a new system based on distributed ledger technology.
The government last year passed new laws closed what it says was a “regulatory gap” by expanding anti-money-laundering rules to cover digital currency exchanges.